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Malaysia Employment Contract Stamp Duty Guide 2025

GeneralJuly 24, 2025 10:00

Malaysia Employment Contract Stamp Duty Guide 2025

What Is Stamp Duty and Why Does It Matter for Employment Contracts

Below is a summarised English interpretation by AuntyHR based on the original Bahasa Malaysia document titled "Soalan Lazim (FAQ) Penyeteman Kontrak Pengajian Di Malaysia" by the Inland Revenue Board of Malaysia (LHDN) on July 3, 2025.

Please refer to the official Bahasa Malaysia version for authoritative reference.
https://www.hasil.gov.my/media/jpxbp2oj/20250703-pkpe_faq-penyeteman-kontrak-penggajian-di-malaysia.pdf

FAQ of Stamping Employment Contract

1. Is it mandatory to stamp employment contracts?

Yes. Under Section 4(1) of the Stamp Act 1949, all instruments listed in the First Schedule must be stamped according to the prescribed rate. Employment contracts are considered legal instruments and must be stamped under the Act.

2. Why is stamping important?

To comply with Section 36 of the Stamp Act 1949. Unstamped instruments cannot be used as evidence in court under Section 52.

3. What are the characteristics of an employment contract?

4. Are temporary, short-term, part-time, or fixed-term employment contracts subject to stamping?

Yes, all written employment contracts must be stamped, regardless of duration or type.

5. Do contracts need to be stamped every time they are renewed?

Yes. Every new contract is considered a separate instrument and must be stamped.

6. Is an offer letter considered an employment contract?

Yes, if it is the only binding document outlining the employment relationship.

7. What about internship or industrial training offer letters that only include allowances?

Yes, if they establish an employer-employee relationship.

8. What about supplementary documents to the offer letter, like IT Usage Policy or benefit letters signed by both employer and employee?

Yes. An addendum signed by both parties is considered an instrument and is subject to stamp duty.
Examples include:

9. Can contracts be in languages other than Bahasa Malaysia or English?

Yes, but they must include a certified line-by-line translation by authorised bodies such as Institut Terjemahan dan Buku Malaysia (ITBM) or the Malaysian Translators Association.

10. Who pays the stamp duty – the employer or employee?

Under Section 33 of the Stamp Act 1949, the party liable to pay the duty is the one listed under the Third Schedule. For employment contracts, the person who signs the contract first is responsible.
Since employers typically sign first, employers are usually responsible for the stamp duty.

11. What is the time frame to stamp a contract after signing?

12. How much is the stamp duty for employment contracts?

13. What happens if you don’t stamp the contract?

A fine can be imposed under Section 63. Late penalties:

14. Are there any stamp duty exemptions?

Yes:

15. Do exempted contracts (before 1 Jan 2025) still need to be submitted?

Yes, for endorsement to obtain the exemption certificate.

16. Is there an endorsement fee?

No, unless the document’s stamp duty exceeds RM10, then a fee applies.

17. Is it necessary to stamp employment contracts after 1 January 2025?

Yes. Contracts must be submitted to the Inland Revenue Board of Malaysia (LHDNM) for stamping in accordance with subsection 4(1) of the Stamp Act 1949.

18. Will a penalty be imposed on contracts stamped after 1 January 2025?

No penalty will be imposed if the contract is stamped on or before 31 December 2025.

19. Will the penalty waiver be automatic in the STAMPS system?

Yes, between 1 Jan – 31 Dec 2025.

20. What about contracts signed from 1 Jan 2026 onwards?

They are subject to RM10 duty and late penalties if not stamped on time.

STAMPING PROCEDURES VIA STAMPS SYSTEM

(STAMP ASSESSMENT AND PAYMENT SYSTEM)

21. Steps to stamp your contract online:

a) Register an account at https://hasil.gov.my

b) Log in → Forms → General Stamping → Choose Office/Date → Select “Employment Contract” → Upload → Submit

c) Processing takes approximately 5–7 working days

d) Pay the assessed stamp duty once the assessment is issued

e) Download the digital stamp certificate and attach it to the original contract

22. Payment Methods:

23. Group Submission

Submit a feedback form via https://maklumbalaspelanggan.hasil.gov.my/Public/ to obtain the XML specification for bulk stamping.

24. Contact for Help

Looking for new career opportunities? Check out our latest job openings here: Job listings

Need hiring support? Connect with Reeracoen Malaysia today!

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Reference:
https://www.hasil.gov.my/media/jpxbp2oj/20250703-pkpe_faq-penyeteman-kontrak-penggajian-di-malaysia.pdf
https://www.linkedin.com/posts/simlingku_faq-stamping-employment-contracts-in-malaysia-ugcPost-7347798668135014403-_xTR/?utm_source=share&utm_medium=member_desktop&rcm=ACoAABVQ5s8BN8tHWQUgdInlWvyXJqBdQPu6n1w
https://visionwide.co/frequently-asked-questions-faq-stamping-employment-contract
https://landco.my/social/lhdn_stamp_duty_update

Malaysia Employment Contract Stamp Duty Guide 2025

Malaysia Employment Contract Stamp Duty Guide 2025

What Is Stamp Duty and Why Does It Matter for Employment Contracts

Stamp duty is a government tax levied under the Stamp Act 1949 (Malaysia), required to validate legal documents, especially employment contracts, making them enforceable in Malaysian court.

All employment agreements, including full-time employment agreements, part-time contracts, fixed-term/ contract-based employment agreements, and Internship agreements be stamped within 30 days of signing. Late stamping can incur penalties.

FAQ of Stamping Employment Contract

1. Is it mandatory to stamp employment contracts?

Yes. Under Section 4(1) of the Stamp Act 1949, all instruments listed in the First Schedule must be stamped according to the prescribed rate. Employment contracts are considered legal instruments and must be stamped under the Act.

2. Why is stamping important?

To comply with Section 36 of the Stamp Act 1949. Unstamped instruments cannot be used as evidence in court under Section 52.

3. What are the characteristics of an employment contract?

Clear identification of the employer and the employee

Regular wage payments

Stated working hours and location

Adherence to company policies

Provision of statutory benefits (EPF, SOCSO, annual leave)

Work under supervision and direction

Prohibition from working with third parties

4. Are temporary, short-term, part-time, or fixed-term employment contracts subject to stamping?

Yes, all written employment contracts must be stamped, regardless of duration or type.

5. Do contracts need to be stamped every time they are renewed?

Yes. Every new contract is considered a separate instrument and must be stamped.

6. Is an offer letter considered an employment contract?

Yes, if it is the only binding document outlining the employment relationship.

7. What about internship or industrial training offer letters that only include allowances?

Yes, if they establish an employer-employee relationship.

8. What about supplementary documents to the offer letter, like IT Usage Policy or benefit letters signed by both employer and employee?

Yes. An addendum signed by both parties is considered an instrument and is subject to stamp duty. Examples include:

IT Usage Policy – subject to duty as it is a binding agreement

Letter of Benefits – subject to duty as it is a binding agreement

Study Sponsorship Offer – subject to duty under sub-item 22(4) of the First Schedule of the Stamp Act 1949

9. Can contracts be in languages other than Bahasa Malaysia or English?

Yes, but they must include a certified line-by-line translation by authorised bodies such as Institut Terjemahan dan Buku Malaysia (ITBM) or the Malaysian Translators Association.

10. Who pays the stamp duty – the employer or employee?

Under Section 33 of the Stamp Act 1949, the party liable to pay the duty is the one listed under the Third Schedule. For employment contracts, the person who signs the contract first is responsible. Since employers typically sign first, employers are usually responsible for the stamp duty.

11. What is the time frame to stamp a contract after signing?

Within 30 days if signed in Malaysia

Within 30 days of receipt in Malaysia if signed overseas

Stamp duty must be paid within 14 days of assessment.

12. How much is the stamp duty for employment contracts?

RM10 per original copy (if deemed an employment contract)

For service contracts (contract for service – i.e., not an employer-employee relationship), different rates apply under item 22(1)(a) of the First Schedule

Duplicate contracts: RM10, if the original was properly stamped

13. What happens if you don’t stamp the contract?

A fine can be imposed under Section 63. Late penalties:

Within 3 months: RM50 or 10% of duty (whichever is higher)

After 3 months: RM100 or 20% of duty (whichever is higher)

14. Are there any stamp duty exemptions?

Yes:

Contracts signed before 1 Jan 2025 – exempt from duty and penalty

Contracts signed between 1 Jan – 31 Dec 2025 – penalty exempted if stamped before 31 Dec 2025

From 1 Jan 2026 onward – subject to full duty and penalties if stamped late

15. Do exempted contracts (before 1 Jan 2025) still need to be submitted?

Yes, for endorsement to obtain the exemption certificate.

16. Is there an endorsement fee?

No, unless the document’s stamp duty exceeds RM10, then a fee applies.

17. Is it necessary to stamp employment contracts after 1 January 2025?

Yes. Contracts must be submitted to the Inland Revenue Board of Malaysia (LHDNM) for stamping in accordance with subsection 4(1) of the Stamp Act 1949.

18. Will a penalty be imposed on contracts stamped after 1 January 2025?

No penalty will be imposed if the contract is stamped on or before 31 December 2025.

19. Will the penalty waiver be automatic in the STAMPS system?

Yes, between 1 Jan – 31 Dec 2025.

20. What about contracts signed from 1 Jan 2026 onwards?

They are subject to RM10 duty and late penalties if not stamped on time.

STAMPING PROCEDURES VIA STAMPS SYSTEM

(STAMP ASSESSMENT AND PAYMENT SYSTEM)

21. Steps to stamp your contract online:

a) Register an account at https://hasil.gov.my

b) Log in → Forms → General Stamping → Choose Office/Date → Select “Employment Contract” → Upload → Submit

c) Processing takes approximately 5–7 working days

d) Pay the assessed stamp duty once the assessment is issued

e) Download the digital stamp certificate and attach it to the original contract

22. Payment Methods:

FPX (online transfer)

Virtual Account (VA) – for bulk payments, non-FPX banks, or international remittance

23. Group Submission

Submit a feedback form via https://maklumbalaspelanggan.hasil.gov.my/Public/ to obtain the XML specification for bulk stamping.

24. Contact for Help

Hasil Contact Centre: 03-89111000

HASiL Live Chat

Yes. An addendum signed by both parties is considered an instrument and is subject to stamp duty.
Examples include:

Under Section 33 of the Stamp Act 1949, the party liable to pay the duty is the one listed under the Third Schedule. For employment contracts, the person who signs the contract first is responsible.
Since employers typically sign first, employers are usually responsible for the stamp duty.